BOE’S Carney Expresses Support for Yellen

Bank of England Gov. Mark Carney on Monday gave his support to Federal Reserve Chairwoman Janet Yellen as she leads the Fed in paring back its bond-buying program.

The US central bank has come under fire in some quarters for contributing to the financial turbulence in emerging markets. Since the Fed said it planned to begin scaling back its easy-money policies starting in January, investors have fled emerging-markets assets amid expectations of improving returns in the U.S. and slowing growth in many developing economies.

In a show of central-bank solidarity, Mr. Carney said the Fed had been “as transparent as possible” in signaling its plans, including the pace at which it intends to taper its bond purchases.

“I have every confidence that the Fed and Chairwoman Yellen will take the right decisions,” Mr. Carney said in an interview with Australia’s ABC network.

The Group of 20 industrialized and developing economies in Sydney agreed this weekend on a suite of policies aimed at boosting global growth by $2 trillion over the next few years. As part of the deal, central banks pledged to communicate their plans clearly and in a timely fashion, underscoring the importance policy makers attach to trying to limit any surprises as the world economy slowly heals.

In the U.K., Mr. Carney has tried to foster a stronger economic recovery by providing households and businesses with guidance on the likely trajectory of interest rates, a move aimed at spurring greater spending, investment and hiring. Other central banks, including the Fed, are pursuing similar “forward guidance” strategies. Mr. Carney said in the ABC interview that the BOE’s policy has worked, citing quickening growth, cooling inflation and falling unemployment. But he added recovery still has some way to go, adding officials are in “no rush” to raise their benchmark interest rate.

Mr. Carney also chairs the Financial Stability Board, the G20’s financial regulation taskforce. He said recent allegations of collusion in foreign exchange markets to fix prices are “very troubling,” especially given the breadth of alleged wrongdoing.

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